Report: Volusia, Flagler are tops in nation for home-flipping

Of the 729 homes flipped in Volusia County through June 30, an average gross profit of $51,657 was made; in Flagler, where 528 homes flipped, it was $43,721.

BOB KOSLOWBUSINESS WRITER

Volusia County is the nation's most profitable place to flip a house and Flagler County is No. 3, according to a new national report. Of the 729 homes flipped in Volusia County so far this year, through June 30, an average gross profit of $51,657 was made from the sales, according to Irvine, Calif.-based RealtyTrac. The average gross profit earned from the 528 homes flipped in Flagler County in the first half of the year was $43,721, according to the report, which defines flipping as homes that are bought and resold within six months. Some area Realtors expressed surprise at the high ranking for Volusia and Flagler counties, but not at the amount of properties being flipped locally."Anytime we see the kind of activity we have had and with the drop of inventory, prices are going to go up and there are always investors looking to take advantage of that," said John Adams, general manager of Adams Cameron & Co. Realtors in Daytona Beach. "If someone bought a home late last year, put some money into it and sold it the first half of this year, it makes sense they might make some money." That's not to say that the profits reported by RealtyTrac all went into flippers' pockets. The gross profit, said Daren Blomquist, vice president of RealtyTrac, does not account for money spent on improvements to the property. "A lot of work and money go into these homes and someone can get really stung by what they don't see in due diligence," said Sheriff Guindi, broker/owner of Prudential Transact Realty in Ormond Beach. Guindi has a client who recently flipped two houses in Ormond-by-the-Sea with gross profits in the $80,000 range, but the client spent tens of thousands of dollars on improvements and repairs, which ate into the net profit. "These kinds of homes almost always need something, a roof, air conditioner or a remake in the kitchen," said Bill Navarra, broker/owner of Realty Pros Assured in Ormond Beach. "We are definitely seeing flipping in some areas like Ormond-by-the-Sea. Of all the areas within a quarter mile of the ocean in Florida, we are probably the most undervalued and so we are seeing a lot of investors who are also buying and renting out the property rather than flipping." RealtyTrac analyzed deed records in metro areas throughout the country that had at least 500 flips during the first half of the year and where flipping had increased 10 percent or more and gross profit was at least 10 percent. Volusia County, at 82 percent, had the highest average gross profit for flips of any metro area in the nation, according to RealtyTrac's calculations, Blomquist said. Flagler County's average gross profit was estimated at 34 percent. "It's a necessary piece of the market with a benefit of moving homes from distressed to nondistressed," Blomquist said. "The ideal market is one where values had overcorrected downward and are bouncing back up. The investors are relying on low prices, rehabbing costs and the boost in appreciation." That describes what's been happening locally, said Doris Dolamore, broker/owner of Atlantic Homes Realty in Palm Coast, who flipped two Palm Coast homes in recent months, making a net profit of about $22,000 on each. "At the peak of the boom, Flagler was the fastest-growing county in the country and there was so much building going on," she said. "That's why we crashed so hard and values went down 60 to 70 percent. With prices going up again, flipping works." Flipping may slow locally in the coming months as home prices continue to rise and profit margins become thinner, area Realtors said. "I see more people buying homes and renting them out, looking for the 10 to 12 percent return while they wait for the homes to appreciate more," said Anthony Viscomi of Viscomi Realty in Ormond Beach. Viscomi is also a builder who co-owns Viscomi Homes.